The Law of demand is considered one of the chief fundamental concepts in economics. It executes with the supply law to label how possessions are allotted by market frugalities and recognize the charges of services and products detected in regular transactions. The demand law articulates the relationship between quantity demanded and its related price. It mentions that the request is inversely related to the price, which signifies that the quantity demanded rises with the decrease in price and declines with the price increase. It arrives due to lessening marginal utility, which states that consumers make usage of the first elements of the economic good they buy to aid their most urgent requirements first. Then they may use every successive unit to suit lower-valued needs. This inverse relationship in demand and price is grounded on other things staying equal.
As per the economics assignment helper, there tend to be two major ways to visualize the Law of demand – the demand curve and the demand schedule. The demand schedule depicts the exact quantity bought at any offered price. Demand curve plots such numbers on a chart. Quantity is mentioned on the x-axis or horizontal axis, and the price is mentioned on the y-axis or vertical axis. If the amount bought alters a lot when the rate does, it is known as elastic demand.
An instance of this can be something like purchasing ice cream. If the rate increases too high for the preference, customers could buy a special dessert. On the other hand, if the quantity does not alter much when the rate does, that is known as the inelastic demand. An instance of this is gasoline. Customers are required to purchase enough to acquire to work, irrespective of the price. The aspects that recognize the level of demand are known as determinants. They are part of all other things that require equality under the term ceteris paribus. The factors of demand are income, preferences of tastes, price of related goods and expectations of the customers. If other factors change, customers will purchase more or less of the given commodity even though the price stays the same. It is known as the shift in the demand curve. Learn more about this concept by availing live sessions from assignment helpers online.
The below-mentioned phrase depicts certain significant assumptions that form the basis of this Law.
Law of demand – Assumptions
- There tends to be no change in preferences and tastes of customers
- The consumers’ income will remain constant
- These constitute to be no change in customs
- The commodity to be used must not confer difference on the customer.
- There must not be any substitutes for the commodity.
- There must be no change in rates of other products
- There must not be any change in product quality
Factors that affect demand
Experts who provide economics assignment writing services say that the position and shape of the demand curve are affected by several factors. An increase in income led to the rise in demand for normal economic products as individuals tended to be willing to spend more. The availability of close substitute goods that compete with the given financial products will decrease the demand for the good as they can satisfy the customers' similar needs and wants. Other aspects like future expectations, alterations in background environmental circumstances, or variations in the perceived or actual quality of the goods can alter the demand curve as they change customers' preferences for how the product can be cast off and how instantly it is required.
Exceptions to the Law of demand
In specified cases, the demand curve slopes up, which signifies a positive slope. However, in some circumstances, customers purchase more when the price of a commodity increase and less when there is a fall in price. Several factors are attributed to the upward sloping demand curve and these are explained below by cheap assignment help experts:
War
If scarcity is feared in a projection of war, individuals might start purchasing for setting up stocks or hoarding even when there is a price rise.
Depression
During the phase of depression, the rates of goods tend to be very less, and the demand for them is also less. It is due to the reason that there is a deficiency of purchasing power with the customers.
Giffen Paradox
If the good happens to be a necessary product like wheat flour and its rates rise, customers are pressured to restrain the consumption of more costly goods like fish and meat, and wheat flour being the cheapest food, they will buy more of it. In the scenario of an underdeveloped economy, customers are consuming more of superior goods like wheat with the decrease in the fall in rates of inferior goods like maize. As an outcome of this, the demand for maize will decline. Students often avail online assignment writing services to write their assignments on Giffen paradox.
Veblen goods
Specific types of prestigious goods violate the Law of demand. Normally, they are luxurious goods that signify the social and economic status of the owner. Thus, customers are ready to consume Veblen goods even more with the price rise. Veblen goods include expensive wines, luxurious cars and designer suits.
